Green Growth in the Greater Mekong Subregion

Green economy, green growth and Low Emissions Development in the Greater Mekong

Economic development in the Greater Mekong Subregion (GMS) has outpaced many other parts of the world over the past two decades with much growth fueled by demand within the Asia Pacific for food, energy, and commodities. With the exception of Thailand, the Mekong countries are emerging from a process of economic transition and transformation, showing a rapid shift from subsistence farming to diversified production bases – and from centrally planned economies to more open market-based systems. By 2030 at least 50 per cent more food, 45 per cent more energy and 30 per cent more water must be secured to meet the needs of the world’s population. Many Asian countries, particularly China and India, already find it impossible to meet domestic demands for their own natural resources. With increased integration in global and regional markets, continued growth in these countries is likely to be fuelled to a large degree by natural resource exploitation.

The GMS is the ‘rice bowl’ of Asia and at its heart lays the Mekong River. Winding almost 3,000 miles from the Tibetan plateau down to the South China Sea, it boasts the world's largest inland fishery – contributing 25 per cent of the global freshwater catch, providing livelihoods for 60 million people and second only to the Amazon River in terms of fish biodiversity.iv Natural Capital generates a flow of provisioning, regulating, cultural and supporting ecosystem services like clean water, climate mitigation, flood protection, renewable natural resources and storm protection. Together, these generate inputs to primary productivity, vital life support services and economic production that are critical to human well-being and economic production in the GMS, as they secure the livelihoods of a large percentage of the rural population. This is particularly important for poor women and men who rely heavily on natural resources for their livelihoods and environmental degradation is one of the major determinants of their poverty. Therefore a healthy and productive environment contributes significantly to human being and pro-poor economic development.

Mekong countries remain relatively well-endowed in natural capital, in addition to offering cheap labour and attractive investment opportunities, but signs of pressure and stress on the region’s Natural Capital are becoming more apparent alongside rapid rates of growth and market development. Escalating land, resource and infrastructure demands arising from urbanization and industrialization combined with a rapidly growing human population means that biodiversity and ecosystem services in the Mekong countries currently face unprecedented threats. At the same time, climate change is affecting ecological productivity and economic vulnerabilities in ways that may encourage even greater pressures on the natural system and cause progressively greater stresses to human and economic systems.

At the food-energy-water security nexus, food demand alone in the Mekong countries is projected to grow by between 20 and 50 per cent by 2030. A quarter of the GMS population has no access to electric energy, but this gap is predicted to close with demand expected to increase by 175 per cent between 2010 and 2025. The use of water for agriculture, energy production, and domestic and industrial use is increasing exponentially, within the GMS countries and at the regional level. Land use, particularly for agriculture, biofuels and urban settlement, and transport infrastructure, are two sectors that depend and impact particularly heavily on the GMS’ Natural Capital base. Given the importance of Natural Capital stocks and ecosystem services in the GMS countries, as well as the international attention given to Green Economy in recent years, GMS countries have started to consider the contribution that green growth could make to the resilience of their economies and societies.

Shifting to a green economy recognizes the value of nature for millions of people in the GMS, now and in the future. Many are moving forward on a green growth agenda in the understanding that this development pathway offers the potential for sustainable economic development with more equitable sharing of the gains. Currently, there are a number of unique opportunities for the transition to a green economy. This report focuses on some signals of policy progress on this transition, barriers to progress, and recommendations for moving the agenda forward.